apartment financing | Ashworth Partners

Apartment Loan Spread Spikes as Rate Flatlines In Face of Falling Treasuries

Once again apartment building investment loan rates have hit the hard boundary of 4.5% even while the 10yr Treasury (T10) falls back below 2% for the first time since May 2013. This is causing the 120 day average spread to begin bending upwards. Currently it’s 2.178% on the back of a 2.46% weekly spread as of Monday when the T10 was passing through 2.04% on its way to 1.96% yesterday:

Apartment Building Investment Loan Rates vs 10 year Treasury — Click on image for full size.

The ULI <60 LTV rate has been bouncing in the 3.5-3.6% range but that’s a function of it being quoted on a spread basis and the only change there since the middle of November was when it dropped 1 basis point (1bp) in the middle of December; chalk it up to holiday season hibernation.

It really looks like The Great Columbus Day Apartment Loan Rate Massacre was the Continue reading Apartment Loan Spread Spikes as Rate Flatlines In Face of Falling Treasuries

Apartment Loan Rate Stays Below 5% For 10th Week

The apartment investment loan we tract (see below for details) clocked in at 4.861% this week making it the 10th week in a row below 5%. Meanwhile the spread between it and the benchmark 10 year Treasury (T10) held in the 210 -220 basis point range over the last six weeks. The T10 itself had been in the 2.7% range over the last month but dipped to 2.65% this week:

Speaking of the spread between the T10 and the ten year apartment loan rate, now that Continue reading Apartment Loan Rate Stays Below 5% For 10th Week

Apartment Loan Rate Falls To Nine Month Low of 4.743%

After spending just one week above its six month moving average the spread between the apartment investment loan rate we track and the 10 year Treasury (T10) fell to 2.143 with the apartment loan rate at a nine month low of 4.743%. Meanwhile the T10 bounced up to 2.8%, climbing 20bp in the past week:

Speaking of the spread between the T10 and the ten year apartment loan rate, now that we have more than a year’s worth of data Continue reading Apartment Loan Rate Falls To Nine Month Low of 4.743%

Apartment Investment Loan Rates Drift Lower But Spread Widens

Over the last month the apartment loan rate we track eased slightly from 5.17% to just under 5 at 4.959% as the 10 year Treasury continued to fall causing the spread to rise above its 6 month average for the first time since July of last year but remains tighter than a year ago:

Speaking of the spread between the T10 and the ten year apartment loan rate, now that Continue reading Apartment Investment Loan Rates Drift Lower But Spread Widens

Good News on Latest 10yr Treasury, Apartment Building Loan Rates and Spread Chart

In more good news for apartment building investors, both the 10 year Treasury and apartment loan rates have moderated since the Fed’s “non-taper” announcement in mid-September. The spread between the T10 and the 10 year apartment loan rate we track has come in as well. Since 9/16 the Treasury has drifted down from 2.88% to yesterday’s quote of 2.53% while the loan rate has moved from 5.282 down to 4.921, bringing the spread in to 2.381 from 2.402. The average spread for 2013 has also narrowed to 2.573%:

Notes about the apartment Continue reading Good News on Latest 10yr Treasury, Apartment Building Loan Rates and Spread Chart

Financing still tight in secondary and tertiary apartment markets says NMHC.

The April 2012 National Multifamily Housing Council’s Quarterly Survey of Apartment Market Conditions was conducted April 16-23, with 91 CEOs and other senior executives of apartment-related firms nationwide responding.

Capital availability lacks uniformity. Only 17 percent of multifamily firms reported that capital is available for all property types in all markets. By contrast, 36 percent said it is constrained in secondary and tertiary markets and 34 percent said it is constrained for all properties other than top-tier ones – even in primary markets.

The Debt Financing Index declined to 65 from 74. As the only index that dropped below 50 in the past nine quarters (48 in Q4 2010), borrowing conditions continued to improve for the industry. Just four percent believed conditions worsened from last quarter, compared to 34 percent who reported improving conditions.

The Equity Financing Index grew slightly to 62 from 60. One third of respondents reported quarter-to-quarter equity financing as more available, compared to nine percent reporting less availability.

See the excellent exec sum on Joseph Bernard Investment Real Estate’s blog here: Market Conditions Improve For Apartment Industry

Latest NMHC Multifamily Survey: Tightening Markets, More Sales, Debt and Equity Financing Becoming More Available.

See the report here: NMHC Quarterly Survey of Apartment Market Conditions